Understanding the Market | Gold stocks continue to decline, international gold prices hit new highs, Morgan Stanley states that the decline in central bank demand is the biggest risk
Gold stocks continue to decline, with LINGBAO GOLD down 5.51%, China Silver Group down 4.9%, CHIFENG GOLD down 3.96%, and ZIJIN MINING down 2.79%. Comex gold futures have surpassed $3,700, and JP Morgan expects spot gold prices to exceed $4,000 by 2026. If the independence of the Federal Reserve is compromised, gold prices could rise to $5,000. JP Morgan warns that a sharp decline in central bank gold purchasing demand may affect the upward trend in gold prices. Cathay Securities points out that rising expectations for interest rate cuts will boost prices of precious metals and industrial metals
According to Zhitong Finance APP, gold stocks continue to decline. As of the time of publication, Lingbao Gold (03330) fell by 5.51%, trading at HKD 15.79; China Silver Group (00815) fell by 4.9%, trading at HKD 0.485; Chifeng Gold (06693) fell by 3.96%, trading at HKD 29.62; Zijin Mining (02899) fell by 2.79%, trading at HKD 28.56.
On the news front, Comex gold futures have broken through the USD 3,700 mark, setting a new historical high. JP Morgan expects spot gold prices to exceed USD 4,000 per ounce in the first quarter of 2026. Additionally, if the independence of the Federal Reserve is compromised, the rotation of investor funds could push gold prices to a high of USD 5,000 within two quarters. JP Morgan believes that the biggest risk to gold prices lies in a sharp decline in central bank gold purchasing demand that exceeds expectations. The bank pointed out that if prices rise too high, leading to a significant drop in central bank demand, it could challenge the sustainability of the upward trend.
Cathay Pacific Securities stated that the U.S. August CPI was basically in line with expectations, coupled with a gradually evident weakening job market, which has led to a continuous warming of interest rate cut expectations. With expectations of a liquidity turning point, there has been a significant boost to the prices of precious metals and industrial metals. As the September interest rate meeting approaches, the market is waiting for guidance from the Federal Reserve on the subsequent interest rate cut path, while the ongoing negotiations between China and the U.S. may amplify metal price fluctuations
